CASE STUDY
INFLUENCING ATM USAGE
THROUGH SERVICE DESIGN
Designing an ATM service that minimizes the use of
other bank ATMs by a bank’s customers
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Guts Service Design Methodology
> Insights
Insights about the Market, Consumer Behaviour, Technology Trends, Industry
Practices and Company’s Positioning, to identify gaps in service offerings
> Disruptive and Incremental Value Propositions
Value Propositions for radical, market altering innovation and incremental,
experience enhancing innovation.
> Validation
Validate these value propositions through discussions with Client and interviews
with customers
> Business Case
A business case for the viability and profitability of the short-listed Value
Propositions
> Prototyping
Build Service Prototypes to test innovations
> Blueprint for Deployment
Make a blueprint for large scale deployment
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Service Problem
Reserve Bank of India mandates that from April 1, 2009
banks cannot charge their customers for the use of
ATMs owned by other banks.
However, when BANK A’s customer uses BANK B’s
ATM, BANK B charges Bank A Rs.17 per transaction.
Until now, this charge was passed on the customers.
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Implications
BANK A is a mid-sized bank with a small ATM network.
In the absence of any extra charges, BANK A’s
customers are likely to use ATMs owned by other
banks which are more conveniently located and when
BANK A’s ATM is not available.
BANK A is saddled with the cost of this usage, without
being able to pass it on to customers.
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Service Design Goals
1) Minimize the use of other bank ATMs by
BANK A’s customers
2) Understand ATM usage patterns and
create a more meaningful ATM
experience
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USAGE SCENARIOS
> REGULAR USE ATM
> HOME CITY EMERGENCY CASH WITHDRAWAL
> OUSTATION CASH WITHDRAWAL
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REGULAR USE ATM
The ATM that a customer uses for regular
withdrawal of money and to avail other services
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”Why do you use ATMs of other
banks?”
“ Its located very close my house
“ My Husband has an account there, we go
to the ATM together
“ There is always a long line at my bank’s
ATM
“ Its on the way to my office
“ Because there’s no difference in service between my
bank’s ATMs and other ATMs
“ Its FREE now! I can use whichever ATM I want
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”Why didn’t you use other bank’s
ATMs earlier?”
“ I didn’t know my card works at all
ATMs… I read in the papers that now I
can use it at all ATMs
“ …because earlier they charged me Rs.20
per transaction at other ATMs… now its
free!
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HOME CITY EMERGENCY
CASH WITHDRAWAL
When a customer runs out of cash and
withdraws money from an ATM in an
emergency, usually for a specific purpose.
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”When do you need to withdraw
cash in an emergency?”
“ When I’m out shopping and run out of cash
“ If I go to pay bills and don’t have enough cash
When I get out of a cab and don’t have cash
“ to pay the fare
“ When I eat at a restaurant and find that
I’m out of cash
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ATM USE WHILE TRAVELLING
When a customer uses an ATM in a new city,
while on a business trip or vacation
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”When you’re travelling, would
you use any bank ATM you find?”
“ Yes, ofcourse ! I don’t know where my
bank’s ATM is located and even if I did,
who’s going to go looking for it?? Even if
I have to pay a little extra, I’d use the
ATM that’s close to where I’m staying
or near the station
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SERVICE FACTORS
What influences the ATM usage behaviour of customers?
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location
convenience
cost
ancillary services
non-cash transactions
travel shopping
long lines at ATM
restaurants Bill Payment
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Insight 1
Until the RBI mandate, the use of other
banks ATM was chargeable. This Charge of
Rs.20 was a ‘DISINCENTIVE’ for customers
and made them use their own bank’s ATM
except in an emergency.
In absence of this ‘disincentive’, the
bank needs to create an INCENTIVE
for their customer to prefer using
their own ATMs.
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Incentivize the use of the
bank’s own ATMs
Why should I use only my own bank’s ATM
when using any ATM is free?
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REWARD POINTS
Create a system of reward points, awarded for
using the bank’s own ATMs and redeemable for
holidays, appliances and other products/services.
This positive incentive replaces the earlier
disincentive of a Rs.20 fee for using other bank
ATMs
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COUPONS
Dispensing coupons (through the slip printer)
with discounts on food and shopping,
through marketing tie-ups with restaurants
and shops.
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Disincentives / Incentives
ATM BANK A
A Pre-April 2009
Rs.20 charge a
disincentive to use
other bank ATMs.
Chooses to use own
bank ATM and plans
ATM BANK B cash withdrawal
B April 1, 2009
C Post Service Design
ATM BANK C
Incentives to use own
Cost disincentive to
bank ATM: Reward points,
use any bank’s ATM
discount coupons,
removed. Uses ATMs
ancillary services.
of other banks freely.
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Insight 2
When there was a cost (DISINCENTIVE) to
withdrawing money from other ATMs, a
user planned cash withdrawals and was
more careful not to run out of cash.
In absence of this ‘disincentive’, the
bank needs to create simple, intuitive
tool to encourage the user to keep a
track of his cash balance.
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Help users record where and
how much cash they spent
CREATE A SMS BASED SERVICE that
allows a user to send an SMS to her
bank account when she spends her
cash. This service will not only allow
her to record and account for cash
expenses, but will also send her an
alert when her cash balance falls
below a certain amount (or even
when she overshoots her monthly
shopping budget!)
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Cash Management and Recording
Record of cash
She SMSes a transaction
B transactions
A to her bank account The transaction details
are recorded in her
Shopping, clothes, Globus bank statement.
Rs. 2,500 This means she gets a
break-up of even her
cash transactions
Custom Alerts
C
She can set alerts to be
notified by SMS if her
cash balance falls below
a certain amount.
Or even if she exceeds
a pre-set shopping budget!
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A bank statement
currently only shows a
single entry for ATM
withdrawals. I don’t have
any record of where the
money was spent.
The SMS service will allow a user to message details of cash
expenses to her account. This will be incorporated into the bank
statement to show detailed break-up of each cash withdrawal.
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Only 70% of ATM activity is cash-withdrawal.
30% is non-cash and doesn’t require physical contact
Make all non-cash activities
mobile phone centric.
This includes checking A/c
balance, seeing a mini-statement,
stop cheque orders and other
transactions. Promote this heavily
so that a customer will simply
reach for his mobile phone and
think about going to an ATM only
for cash withdrawal.
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Insight 3
LOCATION and PROXIMITY replace COST as
the factor for choice of ATM. The cost
disincentive can be reinstated by providing a
reward incentive.
But if it isn’t easy to find a bank’s ATM, the
customer will forgo the rewards incentive in
favour of proximity.
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ATM locations on call
Make your bank’s ATM easy to find. Can I SMS my
location and find the closest ATM? If I book a flight
to Srinagar, can I get a map with your ATMs
marked, along with my ticket? Can I just call and
ask for directions to an ATM?
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ATM Signage
Make it known that you have an ATM in the area.
Put street signs, notices in shops and restaurants,
location cards in hotel rooms…
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Insight 4
Apart from hard factors like cost and
proximity, the usability of the ATM will also
start mattering now. A bank cannot get
away with a dirty ATM, peeling wall paint
and badly designed User Interface.
Banks will have to work on improving the
user experience inside the ATM. This will
not only help retain their customers, but
attract customers from other banks
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Design the ATM for everyone
Make the ATM accessible and useful for all
categories of customers. This includes the user
interface, bouquet of ancillary services, notices
within the ATM etc…
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ATM Experience for Youth
Design an ATM experience that appeals to young
users. While they don’t have too much money, they
withdraw smaller amounts more often and can cost
the bank a lot if they use another bank’s ATM
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THANK YOU.
We would love to hear from you.
Please send your comments to
abhi@gutse.in
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